Iran, Europe, And Oil: The Cost Of An Export Halt

February 15, 2012

Today, state media in Tehran declared a halt to oil exports to six European countries, apparently in retaliation for recent EU measures aimed at curbing Iran’s nuclear program. (A conflicting statement from the country’s oil ministry, however, is creating confusion about whether the export cutoff will actually occur.) If the oil stoppage goes forward, what impact will it have on Europe?

Information from the Congressional Research Service suggests that the move’s impact would vary considerably from country to country. For instance, one of the countries affected by the move is France, but France receives just 4 percent of its oil from Iran. Greece, in contrast, is not only Europe’s weakest economy; it also imports fully one-fifth of its oil from Iran. Spain and Italy, which are also experiencing economic turmoil, were listed as well. Both of those countries import more than 10 percent of their oil from Iran. The European Union, in large part due to political instability in Iran, had already been taking steps towards greater energy independence. Presumably, today’s events will bring a heightened sense of urgency to that effort.